US economy

Let’s Make a Deal

Economic growth is sputtering as the coronavirus continues to spread. Workers laid off temporarily in the spring or summer are discovering that their jobs are gone forever. Small businesses are guttering out like so many candles in a rainstorm. State and local governments are cutting services. Millions of children are hungry; millions of families can’t pay their rent.

In the early days of the coronavirus pandemic, House Democrats, Senate Republicans and the White House moved with alacrity, at least by Washington standards, to pump out hundreds of billions of dollars in emergency aid. The nation is in need of an encore.

Democrats have made a series of progressively smaller proposals since May. The latest would provide $2.2 trillion, largely aimed at those who need it most, including health care providers, unemployed workers and local governments. Senate Republicans want a significantly smaller bottom line. And President Trump? He can’t seem to make up his mind.

The moment cries out for a president who knows how to make a deal.

Instead, over the last week, Mr. Trump engaged in manic bursts of tweeting, first insisting he wanted a stimulus deal, then pulling the plug on negotiations, then insisting he was ready to talk, then insulting House Speaker Nancy Pelosi, then insisting again that he wanted to act.

The president’s confusing behavior, moreover, was just a condensed version of the past six months. Ever since House Democrats made their opening bid in May, Mr. Trump has yo-yoed between insisting that he wants a deal and losing interest in the hard work of negotiations.

The president failed to press for a deal in July, as the initial round of emergency aid ran out. He failed to press for a deal in August, as the economic rebound predictably began to slow. He failed to press for a deal in September, as evidence accumulated that more aid was needed.

Mr. Trump’s refusal to treat the coronavirus as a serious public health threat is not only a big reason another round of aid is necessary. It also has complicated the negotiations. It is easier to talk in person, but Mitch McConnell, the Senate majority leader, has refused to visit the White House in recent months, citing the administration’s failure to impose basic safety measures. Ms. Pelosi said this week that she would no longer allow Treasury Secretary Steven Mnuchin, the president’s chief negotiator, to visit her office. Those safety concerns have proved very prudent.

Americans now should hope that the president’s latest position as of publication time is sincere — and that it is not too late to rope legislators into an agreement before the election.

Reaching a deal requires the president to go beyond his stated support for another round of stimulus checks and another targeted bailout for the crippled airline industry.

Democrats are right to insist that a stimulus bill should help those who need it most. There is no justification for helping airlines without helping others in need. It doesn’t make sense to send out stimulus checks to middle-class households while withholding aid from children who don’t have enough to eat.

Congress needs to provide funding for public health authorities and health care providers battling the pandemic.

Congress also needs to provide aid for those who are hungry, unemployed or facing a loss of housing. The unemployment rate remains at 7.9 percent, and many workers who lost jobs in the spring are nearing the end of their eligibility for weekly benefits. Such targeted aid is also the best use of taxpayer dollars. Supplemental federal payments to unemployed workers between April and July kept families from poverty and, as they spent, buoyed the broader economy, too. The distribution of $1,200 to most American adults, by contrast, was less targeted and less effective. One study found that recipients spent 40 percent of the money, on average — and households with more income from other sources spent a smaller share.

Aid for state and local governments is also essential. Declines in tax revenue so far have been smaller than many governments projected. Job losses have been concentrated among lower-income workers whose tax bills were relatively modest, while the rising stock market has increased receipts from more affluent households. But the aid Congress provided in the spring was a one-time deal, and state and local governments already have cut roughly 1.5 million workers in anticipation of reduced revenues in coming years.

Democrats and the Trump administration remain within shouting distance of a deal that would put Senate Republicans on the spot.

On Friday, the administration suggested it would back as much as $1.8 trillion in spending — just a little less than the $2.2 trillion in the last House proposal. There are still differences regarding how the money would be spent. But the quickest way for the White House to get across the finish line is to add a little more.

As Jerome H. Powell, the Federal Reserve chairman, said in a blunt speech this week, “the risks of overdoing it” are small at the moment. The greater danger is not doing enough.


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